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Reserves of coal near Longtown spark share tip

By Duncan Bick

Last updated at 08:01, Friday, 01 February 2013

An Australian stockbroker is tipping shares on the strength of coal reserves near Longtown.

Patersons, the country’s largest independent stockbroker, is keen on shares in the Melbourne company New Age Exploration, which has a licence to explore the Lochinvar coalfield straddling the Scottish border.

Patersons describes the coal field as a “very attractive” project.

It is recommending shares in New Age as a speculative buy with growth potential.

Its research note says: “We are initiating coverage on New Age Exploration (NAE), a promising coking-coal exploration company with a very attractive project in the UK called Lochinvar and a strong coal-mining team.”

The coalfield contains coking coal, which is used to produce steel.

It was first discovered in the 1950s by the National Coal Board but never fully explored.

NAE bought a licence to work on just under 26 square miles of the field in 2012 for £12,500.

The area stretches as far north as Evertown, near Canonbie, and as far south as Longtown.

Patersons described this as: “The best £12,500 one could ever spend.”

The stockbrokers have predicted that NAE will be able to make announcements to Australia’s Joint Ore Reserves Committee, which is required under the country’s laws, about its exploration in Lochinvar in the next six months.

The report said the project was good for NAE because of Lochinvar’s closeness to ports such as Workington, and Immingham in Lincolnshire.

It also has road and rail links to the UK’s main steel works, which currently import much of their coking coal.

The exact volume of coal that could be mined in Lochinvar is not yet clear.

The coal seam is at its shallowest in the north and west of the field and any mining operation would be likely to start from this point.